Worldwide
revenues for the augmented reality and virtual reality (AR/VR)
market are forecast to increase by 100% or more over each of the
next four years, according to the latest update to the Worldwide
Semiannual Augmented and Virtual Reality Spending Guide from the
International Data Corporation (IDC). Total spending on AR/VR
products and services is expected to soar from $11.4 billion in
2017 to nearly $215 billion 2021, achieving a compound annual
growth rate (CAGR) of 113.2% along the way.

The United States will be the region with the largest AR/VR
spending total in 2017 ($3.2 billion), followed by Asia/Pacific
(excluding Japan)(APeJ) ($3.0 billion) and Western Europe ($2.0
billion). But then things get interesting as APeJ jumps ahead of
the U.S. in total spending for two years before its growth rate
starts to slow in 2019. The U.S. then pushes back into the top
position in 2020 driven by accelerating growth in the latter
years of the forecast. Meanwhile, Western Europe is expected to
overtake APeJ for the number 2 position in 2021. The regions
that will experience the fastest growth over the 2016-2021
forecast period are Canada (145.2% CAGR), Central and Eastern
Europe (133.5% CAGR), Western Europe (121.2% CAGR) and the
United States (120.5% CAGR).

Within the regions, the industry segments driving AR/VR spending
start from roughly the same place, but then evolve quite
differently over time. The consumer segment will be the largest
source of AR/VR revenues in each region in 2017. In the United
States and Western Europe, the next largest segments are
discrete manufacturing and process manufacturing. In contrast,
the next largest segments in APeJ in 2017 are retail and
education. Over the course of the forecast, the consumer segment
in the U.S. will be overtaken by process manufacturing,
government, discrete manufacturing, retail, construction,
transportation, and professional services. In APeJ, the consumer
segment will remain the largest area of spending throughout the
forecast, followed by education, retail, transportation, and
healthcare in 2021. Consumer spending will also lead the way in
Western Europe, with discrete manufacturing, retail, and process
manufacturing showing strong growth by the end of the forecast.

"The consumer, retail, and manufacturing segments will be the
early leaders in AR & VR investment and adoption. However, as we
see in the regions, other segments like government,
transportation, and education will utilize the transformative
capabilities of these technologies," said Marcus Torchia,
research director of IDC Customer Insights & Analysis. "With use
cases that span both AR & VR environments, we see a significant
opportunity for companies to re-cast how users interact in
business processes and everyday tasks."

"Augmented and virtual reality are gaining traction in
commercial settings and we expect this trend will continue to
accelerate," said Tom Mainelli, program vice president, Devices
and AR/VR at IDC. "As next-generation hardware begins to appear,
industry verticals will be among the first to embrace it. They
will be utilizing cutting-edge software and services to do
everything from increase worker productivity and safety to
entice customers with customized, jaw-dropping experiences."

The industry use cases that will attract the largest AR/VR
investments are also expected to evolve over the five-year
forecast. In 2017, the largest industry use cases will be retail
showcasing ($442 million), on-site assembly and safety ($362
million), and process manufacturing training ($309 million). By
the end of the forecast, the largest industry use cases in terms
will be industrial maintenance ($5.2 billion) and public
infrastructure maintenance ($3.6 billion), followed by retail
showcasing ($3.2 billion). In contrast, the consumer segment
will be dominated by AR and VR games throughout the forecast,
with total spending reaching $9.5 billion in 2021. The use cases
that will see the fastest growth over the forecast period are
lab & field (166.2% CAGR), therapy and physical rehabilitation
(152.0% CAGR), and public infrastructure maintenance (138.4%
CAGR).

Spending
on VR systems, including viewers, software, consulting services,
and systems integration services, are forecast to be greater
than AR-related spending in 2017 and 2018, largely due to
consumer uptake of hardware, games, and paid content. After
2018, AR spending will surge ahead as industries make
significant purchases of AR software and viewers.

The Worldwide Semiannual Augmented and Virtual Reality Spending
Guide examines the AR/VR opportunity and provides insights into
this rapidly growing market and how the market will develop over
the next five years. Revenue data is available for eight
regions, 12 industries, 26 use cases, and eleven technology
categories. Unlike any other research in the industry, the
comprehensive spending guide was created to help IT decision
makers to clearly understand the industry-specific scope and
direction of AR/VR expenditures today and in the future.